own risk standard

A legal test by which an insurer’s decision to reject a policy limits demand because it denies coverage may be measured. (Comunale v. Traders & Gen. Ins. Co. (1958) 50 Cal.2d 654, 660 “An insurer who denies coverage does so at its own risk, and, although its position may not have been entirely groundless, if the denial is found to be wrongful it is liable for the full amount which will compensate the insured for all the detriment caused by the insurer’s breach of the express and implied obligations of the contract…. The insurer should not be permitted to profit by its own wrong.”) The alternative is the Prudent Insurer Standard.